Increased participation, access to affordable childcare and more opportunities for workers have been flagged as key areas to boost workforce productivity.
Australia's treasurers contend the federal government needs to reduce red tape and disincentives to work.
ACT Chief Minister Andrew Barr, who chairs the board of treasurers, said high-quality and affordable early childhood education and care are critical to increase workforce participation and improving gender pay equality.
But he said the Commonwealth needed to consider how to better leverage the costs with state and territories shouldering a significant fiscal burden.
"These improvements will generate significant fiscal benefits for the Commonwealth as a result of increased workforce participation, improved child development and avoided social costs," he wrote in the submission to the employment white paper on behalf of state and territory treasurers.
"There needs to be consideration in the white paper of the structural and systemic barriers faced by different groups, including those in regional and remote areas, who have limited access to childcare."
Mr Barr said the aged and disability care sectors also needed to be looked at to boost workforce participation.
"Linked to this matter is the challenging conditions, low pay rates, and difficulty faced in recruiting workers in the aged care, child care and disability care sectors," he contended.
Mr Barr said this has led to higher staff turnover and labour shortages by discouraging female participation and making it more difficult for parents and carers to find adequate services.
He added low unemployment and high inflation mean broad government spending would not deliver the same level of job creations it otherwise would.
"Australia needs appropriate targeted interventions to help Australians in cohorts who are experiencing above-average unemployment to move into work," he said in the submission.
The federal government's employment white paper will be released in September while public submissions will be made public on Saturday.
The white paper's key themes include the nature of skill shortages, improving employment opportunities, the importance of affordable childcare and housing, flexible training pathways for workers, and the opportunities and challenges of achieving net zero emissions.
Treasury has received more than 400 submissions from community groups, peak bodies, businesses, think tanks, unions, governments and individuals.
Federal Treasurer Jim Chalmers says the government is aiming to build a stronger workforce to boost pay packets and living standards.
"While we can't implement every good suggestion, we take these contributions seriously and we're really grateful to everyone who took the time to make a submission," he said.
"This feedback will help to shape the white paper and the policies we put in place as we look to build a bigger, better-trained, more productive workforce."
